IS THERE CAPITAL GAIN TAX IN HONG KONG?

Simple Tax System

Hong Kong has a simple tax system with low tax rates for businesses and individuals. There is no Capital Gain tax and only have three types of taxes in Hong Kong: Profits tax, Salaries tax and Property tax.

Any other Taxes?

Capital Gain Tax

Hong Kong does not tax capital gains. However, gains on the disposal of assets may be subject to profits tax if the disposal constitutes a transaction in the nature of trade.

Consumption Taxes

Value-added, goods and services, and sales taxes do not apply in Hong Kong.

Estate Taxes

Started from Feb 2006, Hong Kong abolished the Estate Taxes.

Social Security Tax

Hong Kong does not impose any social security taxes. However, employers and employees need to contribute 5% of the salaries or HKD1,500 per month for the Mandatory Provident Fund (MPF) schemes. If the salary is under HKD7,100 per month, then the employee is not required to make contribution. But the employer still has to contribute 5% for the MPF.

Is there any taxes other than Capital Gain tax?

In short, Hong Kong does not have hidden tax, apart from the 3 major taxes, there are Stamp Duties, Custom Duties, Rates and Property tax.

Stamp Duties

Stamp duty imposes on stock transfer. By way of sale and purchase at 0.26% of the consideration per transaction.

Custom Duties

Customs duties are levied on limited categories of dutiable commodities . For examples: tobacco, liquor, methyl alcohol, and hydrocarbons etc. Regardless of whether they are imported or locally manufactured. As far as individuals are concerned, the sale prices includes the duties.

Rates

Rates are an indirect tax levied on properties in Hong Kong. It charged at 5% of the rateable value which is the estimated annual rental value of a property.

Property Tax

Property tax is charged to the owner of any land or buildings (except government and consular properties) in Hong Kong. Nonetheless, the standard rate of 15% on the net assessable value of such land or buildings. On the other hand, net assessable value of a property is the consideration payable to the owner for the right to use the land or buildings less rates paid by the owner and a 20% notional allowance. If the owner is self-using the property, then it is not subject to property tax. Indeed no rent is receivable with respect to that property.

Environmental Taxes

Hong Kong does not exactly have an environmental Taxes, but Plastic Shopping Bag (PSB) charging scheme. Except for plastic bags used for hygiene reasons. All plastic bags are subject to PSB charges. You have to pay $1 for each PSB.

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